What Rights Do I Lose By Choosing Arbitration Over A Divorce Trial?

August 10, 2017
By
Edward R. Weinstein

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Yes, in an Arbitrator's decision cannot be appealed, as opposed to
a trial in the Family Part of the Superior Court of New Jersey. Arbitration
is becoming a more and more common for lawyers to utilize in certain divorce
cases. Couples may always agree to have their attorneys and a mediator
(who many time is a retired attorney or family court judge) resolve their
marital disputes through arbitration, instead of going through litigation
in a New Jersey Family Court. This experienced divorce attorney advises
my clients to think long and hard before signing an arbitration agreement.
Many people are attracted to the concept of a quick divorce, but do not
realize what rights they are giving away by agreeing to arbitrate. One
husband found this out the hard way in a recent New Jersey Appellate Division
case. In Little v. Little, husband Paul Little tried to appeal an arbitration
decision, but learned that unlike a court order, and arbitration award
is subject to a very narrow and limited review on appeal. In addition,
an arbitration award does not need to specify findings of fact or conclusions of law.

Donna and Paul Little were married for twenty-five years. In her divorce
complaint, Donna alleged a
Tevis claim, and sought money damages for battered women syndrome, and various injuries
that she allegedly sustained from spousal abuse. A Tevis claim is a tort
or personal injury claim that a victim of spousal abuse can allege against
their spouse in the divorce complaint when acts of domestic violence have occurred.

In a Tevis claim, a victim of domestic violence can get money for pain
and suffering, compensatory damages for any monies you had to put forth
as a result of the assault by your spouse, and possibly even punitive
damages. To be successful in a Tevis claim, a victim must prove both physical
and emotional damage. This could include medical records, or even having
a doctor testify at trial.

The judge severed the Tevis action from the divorce action, and scheduled
it for trial in December 2013. To sever a claim or cause of action means
a division of a trial into two or more parts. Plaintiffs in civil suits
base their cases on a cause of actions that give the plaintiff the right
to sue. The court may order the lawsuit divided into two or more independent
causes of action. This type of severance occurs only when each cause of
action could be tried as if it were the only claim in controversy. As
a result of severance, the court renders a separate, final, and enforceable
judgment on each cause of action. However, instead of taking the Tevis
claim to trial, both Donna and Paul agreed to the submit it to arbitration.

Donna and Paul mutually agreed on a retired judge to serve as the arbitrator,
and a subsequent arbitration hearing was held on May 29, 2014. At the
hearing, both Donna and Paul testified, and submitted written statements
and documents. Among these proofs, Donna submitted a letter she wrote
to Paul after she first filed for divorce in 2010. This letter was also
submitted to the Law Division in August 2013, after discovery ended. Donna’s
attorney also provided a psychiatrist report that stated she was a victim
of battered woman’s syndrome.

The arbitrator issued a two-page written arbitration decision on June 27,
2014. In this decision he awarded Donna $ 125,000 for mental and physical
injuries she suffered during the course of her marriage to Paul. Interestingly,
this decision did not state any conclusions of law or findings of fact,
but did make reference to Donna’s 2010 letter. Then, Donna filed
a motion to confirm the arbitration award with the Law Division. In response,
Paul filed a cross-motion to set aside the award. Oral argument was heard
by Judge Thomas F. Brogan, who denied Paul’s motion, and granted
Donna’s motion to confirm. He reduced the arbitration award to a
judgment in the amount of $ 125,000, in addition to pre-judgment interest
in an amount of $ 5,691.78. Two orders entered on August 22, 2014 memorialized
these rulings.

Paul appealed the two August 22, 2014 orders, and argued: (1) that the
award was against public policy and should be set aside because there
were no conclusions of law or findings of fact in the decision, so there
was no way of knowing if the award was issued from fraud, corruption,
or other undue means; and (2) the 2010 letter was submitted after the
conclusion of discovery in the Law Division, and therefore the arbitrator’s
reliance on the letter was undue. The New Jersey Appellate Division found
both of these arguments to be without merit.

The New Jersey Appellate Division started its opinion by stating that judicial
scrutiny of an arbitrator’s decision is limited and narrow. The
New Jersey Arbitration Act, N.J.S.A 2A:23B-1 to -32 enumerates and limits a courts power to review
and arbitration decision. This act gives arbitrators broad authority and
power. The purpose of arbitration is to provide a venue for fast, effective
and equitable resolution of issues, so any judicial scrutiny of arbitration
decisions is very much limited.

Under the New Jersey Arbitration Act, an arbitration award can only be
set aside or vacated if: obtained by fraud, corruption, or any other undue
means; there is a finding of bias or misconduct by the arbitrator; the
arbitrator refused to review evidence related to the issue; the arbitrator
acted out of the scope of his or her power; there was no valid agreement
to submit the issue to arbitration; or the arbitration hearing was held
without proper notice.

Paul first argued that the award should be set aside because no conclusions
of law or fact-findings were made by the arbitrator. He argued that public
policy demands findings of fact and conclusions of law, and that without
the same a court cannot reasonably review and determine if the award was
obtained by fraud, corruption, or undue means. The New Jersey Appellate
Division held that this argument was not consistent with New Jersey’s
Arbitration Act.

An arbitrator’s requirements and the scope of his or her authority
and power is controlled by contract. If an agreement to arbitrate does
not explicitly require the arbitrator to follow specific procedures, or
make specific findings of fact, the arbitrator has the discretion to fashion
an award in any manner that is consistent with the Arbitration Act. According
to the New Jersey Arbitration Act, an arbitrator is only required to make
a record of the award. Additionally, the Arbitration Act permits an arbitrator
to conduct the arbitration in any fashion he or she may deem appropriate,
as long as the arbitrator sticks to the goal of resolving the issue quickly
and fairly. In the 2006 case of Kimm v. Blisset, L.L.C., the New Jersey
Appellate Division had already held that unless an arbitration agreement
states otherwise, the role of an arbitrator is merely to determine an
award that resolves an issue. Unless both parties agree beforehand, one
party cannot compel an arbitrator to provide reasons for an award, or
issue a written decision explaining their view of the findings of fact.
Furthermore, a party may not appeal an arbitration award, like they can
appeal a court order.

The New Jersey Appellate Division found that the agreement to arbitrate
did not contain any substantive or procedural requirements for the arbitration
process, nor did it require the arbitrator to state the decision in any
specific way. Therefore, the arbitrator was not under any obligation to
state any conclusions of law or findings of fact. Furthermore, New Jersey’s
public policy actually supports arbitration, and it is consistent with
that policy to allow the arbitrator broad discretion and authority, because
if people want arbitrators to make detailed conclusions of law and findings
of fact, all they have to do is include such a provision in their arbitration
agreement.

Paul also argued that the arbitrator’s reliance on Donna’s
2010 letter to Paul was an undue means, because the letter was submitted
after the end of discovery in the Law Division action. The New Jersey
Appellate Division found that this argument was not consistent with New
Jersey’s Arbitration Act. Unlike courts of law, arbitrators do not
have to abide by the rules of evidence. Instead they have the authority
to determine the relevance, admissibility, and materiality of any evidence.
Moreover, an arbitrator can allow any discovery that he or she finds to
be appropriate, as long as they keep in mind the goal of a fast, fair,
and cost-effective proceeding.

The information on this website is for general information purposes only.
Nothing on this site should be taken as legal advice for any individual
case or situation. This information is not intended to create, and receipt
or viewing does not constitute, an attorney-client relationship.